COVER PAGE
COVER PAGE - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 19, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-11859 | |
Entity Registrant Name | PEGASYSTEMS INC. | |
Amendment Flag | false | |
Entity Central Index Key | 0001013857 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Incorporation, State or Country Code | MA | |
Entity Tax Identification Number | 04-2787865 | |
Entity Address, Address Line One | One Main Street | |
Entity Address, City or Town | Cambridge | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02142 | |
City Area Code | 617 | |
Local Phone Number | 374-9600 | |
Title of 12(b) Security | Common Stock, $.01 par value per share | |
Trading Symbol | PEGA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 81,675,315 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 116,411 | $ 171,899 |
Marketable securities | 235,437 | 293,269 |
Total cash, cash equivalents, and marketable securities | 351,848 | 465,168 |
Accounts receivable | 143,445 | 215,827 |
Unbilled receivables | 239,774 | 207,155 |
Other current assets | 93,819 | 88,760 |
Total current assets | 828,886 | 976,910 |
Unbilled receivables | 132,147 | 113,278 |
Goodwill | 81,954 | 79,231 |
Other long-term assets | 512,410 | 434,843 |
Total assets | 1,555,397 | 1,604,262 |
Current liabilities: | ||
Accounts payable | 25,604 | 24,028 |
Accrued expenses | 46,583 | 59,261 |
Accrued compensation and related expenses | 86,018 | 123,012 |
Deferred revenue | 229,103 | 232,865 |
Other current liabilities | 13,118 | 20,969 |
Total current liabilities | 400,426 | 460,135 |
Convertible senior notes, net | 589,769 | 518,203 |
Operating lease liabilities | 87,088 | 59,053 |
Other long-term liabilities | 18,482 | 24,699 |
Total liabilities | 1,095,765 | 1,062,090 |
Stockholders’ equity: | ||
Preferred stock, 1,000 shares authorized; none issued | 0 | 0 |
Common stock, 200,000 shares authorized; 81,670 and 80,890 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 817 | 809 |
Additional paid-in capital | 148,098 | 204,432 |
Retained earnings | 316,150 | 339,879 |
Accumulated other comprehensive (loss) | (5,433) | (2,948) |
Total stockholders’ equity | 459,632 | 542,172 |
Total liabilities and stockholders’ equity | $ 1,555,397 | $ 1,604,262 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Stockholders’ equity: | ||
Preferred stock, shares authorized (in shares) | 1,000 | 1,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 200,000 | 200,000 |
Common stock, shares issued (in shares) | 81,670 | 80,890 |
Common stock, shares outstanding (in shares) | 81,670 | 80,890 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue | ||||
Total revenue | $ 256,268 | $ 225,951 | $ 895,469 | $ 718,917 |
Cost of revenue | ||||
Total cost of revenue | 84,222 | 77,799 | 251,200 | 234,018 |
Gross profit | 172,046 | 148,152 | 644,269 | 484,899 |
Operating expenses | ||||
Selling and marketing | 152,479 | 132,053 | 457,641 | 395,684 |
Research and development | 64,728 | 60,024 | 191,565 | 177,620 |
General and administrative | 20,176 | 17,907 | 57,607 | 49,192 |
Total operating expenses | 237,383 | 209,984 | 706,813 | 622,496 |
(Loss) from operations | (65,337) | (61,832) | (62,544) | (137,597) |
Foreign currency transaction gain (loss) | 518 | 4,236 | (4,983) | 2,545 |
Interest income | 166 | 243 | 555 | 1,092 |
Interest expense | (1,908) | (5,956) | (5,747) | (13,791) |
(Loss) income on capped call transactions | (14,735) | 18,989 | (7,543) | 19,816 |
Other income, net | 2 | 0 | 108 | 1,374 |
(Loss) before (benefit from) income taxes | (81,294) | (44,320) | (80,154) | (126,561) |
(Benefit from) income taxes | (24,826) | (25,053) | (54,360) | (61,182) |
Net (loss) | $ (56,468) | $ (19,267) | $ (25,794) | $ (65,379) |
(Loss) per share | ||||
Basic (in dollars per share) | $ (0.69) | $ (0.24) | $ (0.32) | $ (0.82) |
Diluted (in dollars per share) | $ (0.69) | $ (0.24) | $ (0.32) | $ (0.82) |
Weighted-average number of common shares outstanding | ||||
Basic (in shares) | 81,526 | 80,537 | 81,284 | 80,191 |
Diluted (in shares) | 81,526 | 80,537 | 81,284 | 80,191 |
Pega Cloud | ||||
Revenue | ||||
Total revenue | $ 78,369 | $ 54,776 | $ 219,520 | $ 147,080 |
Cost of revenue | ||||
Total cost of revenue | 25,524 | 19,717 | 72,132 | 56,238 |
Maintenance | ||||
Revenue | ||||
Total revenue | 83,188 | 74,670 | 237,531 | 220,587 |
Cost of revenue | ||||
Total cost of revenue | 5,293 | 5,478 | 16,074 | 16,645 |
Software license | ||||
Revenue | ||||
Total revenue | 38,295 | 39,784 | 272,148 | 187,023 |
Cost of revenue | ||||
Total cost of revenue | 656 | 691 | 1,962 | 2,354 |
Consulting | ||||
Revenue | ||||
Total revenue | 56,416 | 56,721 | 166,270 | 164,227 |
Cost of revenue | ||||
Total cost of revenue | $ 52,749 | $ 51,913 | $ 161,032 | $ 158,781 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) | $ (56,468) | $ (19,267) | $ (25,794) | $ (65,379) |
Other comprehensive (loss) income, net of tax | ||||
Unrealized gain (loss) on available-for-sale securities | 53 | (166) | 1,184 | (66) |
Foreign currency translation adjustments | (4,400) | 113 | (3,669) | 1,627 |
Total other comprehensive (loss) income, net of tax | (4,347) | (53) | (2,485) | 1,561 |
Comprehensive (loss) | $ (60,815) | $ (19,320) | $ (28,279) | $ (63,818) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Additional Paid-In CapitalCumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive (Loss) |
Balance, beginning of period (in shares) at Dec. 31, 2019 | 79,599 | |||||||
Balance, beginning of period at Dec. 31, 2019 | $ 539,010 | $ 796 | $ 140,523 | $ 410,919 | $ (13,228) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity component of convertible senior notes, net | 61,604 | 61,604 | ||||||
Repurchase of common stock (in shares) | (87) | |||||||
Repurchase of common stock | (6,000) | $ (1) | (5,999) | |||||
Issuance of common stock for share-based compensation plans (in shares) | 564 | |||||||
Issuance of common stock for stock compensation plans | (23,011) | $ 6 | (23,017) | |||||
Stock-based compensation | 23,199 | 23,199 | ||||||
Cash dividends declared ($0.03 per share) | (2,405) | (2,405) | ||||||
Other comprehensive income (loss) | (414) | (414) | ||||||
Net income (loss) | (25,372) | (25,372) | ||||||
Balance, end of period (in shares) at Mar. 31, 2020 | 80,076 | |||||||
Balance, end of period at Mar. 31, 2020 | 566,611 | $ 801 | 196,310 | 383,142 | (13,642) | |||
Balance, beginning of period (in shares) at Dec. 31, 2019 | 79,599 | |||||||
Balance, beginning of period at Dec. 31, 2019 | 539,010 | $ 796 | 140,523 | 410,919 | (13,228) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Other comprehensive income (loss) | 1,561 | |||||||
Net income (loss) | (65,379) | |||||||
Balance, end of period (in shares) at Sep. 30, 2020 | 80,697 | |||||||
Balance, end of period at Sep. 30, 2020 | 529,322 | $ 807 | 201,882 | 338,300 | (11,667) | |||
Balance, beginning of period (in shares) at Dec. 31, 2019 | 79,599 | |||||||
Balance, beginning of period at Dec. 31, 2019 | $ 539,010 | $ 796 | 140,523 | 410,919 | (13,228) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting standards update | Accounting Standards Update 2020-06 | |||||||
Balance, end of period (in shares) at Dec. 31, 2020 | 80,890 | 80,890 | ||||||
Balance, end of period at Dec. 31, 2020 | $ 542,172 | $ (52,205) | $ 809 | 204,432 | $ (61,604) | 339,879 | $ 9,399 | (2,948) |
Balance, beginning of period (in shares) at Mar. 31, 2020 | 80,076 | |||||||
Balance, beginning of period at Mar. 31, 2020 | 566,611 | $ 801 | 196,310 | 383,142 | (13,642) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock (in shares) | (23) | |||||||
Repurchase of common stock | (2,199) | (2,199) | ||||||
Issuance of common stock for share-based compensation plans (in shares) | 349 | |||||||
Issuance of common stock for stock compensation plans | (14,082) | $ 3 | (14,085) | |||||
Issuance of common stock under the employee stock purchase plan (in shares) | 18 | |||||||
Issuance of common stock under the employee stock purchase plan | 1,403 | 1,403 | ||||||
Stock-based compensation | 25,674 | 25,674 | ||||||
Cash dividends declared ($0.03 per share) | (2,413) | (2,413) | ||||||
Other comprehensive income (loss) | 2,028 | 2,028 | ||||||
Net income (loss) | (20,740) | (20,740) | ||||||
Balance, end of period (in shares) at Jun. 30, 2020 | 80,420 | |||||||
Balance, end of period at Jun. 30, 2020 | 556,282 | $ 804 | 207,103 | 359,989 | (11,614) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock (in shares) | (94) | |||||||
Repurchase of common stock | (10,629) | $ (1) | (10,628) | |||||
Issuance of common stock for share-based compensation plans (in shares) | 371 | |||||||
Issuance of common stock for stock compensation plans | (22,520) | $ 4 | (22,524) | |||||
Stock-based compensation | 27,931 | 27,931 | ||||||
Cash dividends declared ($0.03 per share) | (2,422) | (2,422) | ||||||
Other comprehensive income (loss) | (53) | (53) | ||||||
Net income (loss) | (19,267) | (19,267) | ||||||
Balance, end of period (in shares) at Sep. 30, 2020 | 80,697 | |||||||
Balance, end of period at Sep. 30, 2020 | $ 529,322 | $ 807 | 201,882 | 338,300 | (11,667) | |||
Balance, beginning of period (in shares) at Dec. 31, 2020 | 80,890 | 80,890 | ||||||
Balance, beginning of period at Dec. 31, 2020 | $ 542,172 | (52,205) | $ 809 | 204,432 | (61,604) | 339,879 | 9,399 | (2,948) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock (in shares) | (70) | |||||||
Repurchase of common stock | (9,146) | $ (1) | (9,145) | |||||
Issuance of common stock for share-based compensation plans (in shares) | 402 | |||||||
Issuance of common stock for stock compensation plans | (25,509) | $ 4 | (25,513) | |||||
Issuance of common stock under the employee stock purchase plan (in shares) | 24 | |||||||
Issuance of common stock under the employee stock purchase plan | 2,288 | 2,288 | ||||||
Stock-based compensation | 30,100 | 30,100 | ||||||
Cash dividends declared ($0.03 per share) | (2,438) | (2,438) | ||||||
Other comprehensive income (loss) | 280 | 280 | ||||||
Net income (loss) | (6,617) | (6,617) | ||||||
Balance, end of period (in shares) at Mar. 31, 2021 | 81,246 | |||||||
Balance, end of period at Mar. 31, 2021 | $ 478,925 | $ 812 | 140,558 | 340,223 | (2,668) | |||
Balance, beginning of period (in shares) at Dec. 31, 2020 | 80,890 | 80,890 | ||||||
Balance, beginning of period at Dec. 31, 2020 | $ 542,172 | $ (52,205) | $ 809 | 204,432 | $ (61,604) | 339,879 | $ 9,399 | (2,948) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Other comprehensive income (loss) | (2,485) | |||||||
Net income (loss) | $ (25,794) | |||||||
Balance, end of period (in shares) at Sep. 30, 2021 | 81,670 | 81,670 | ||||||
Balance, end of period at Sep. 30, 2021 | $ 459,632 | $ 817 | 148,098 | 316,150 | (5,433) | |||
Balance, beginning of period (in shares) at Mar. 31, 2021 | 81,246 | |||||||
Balance, beginning of period at Mar. 31, 2021 | 478,925 | $ 812 | 140,558 | 340,223 | (2,668) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock (in shares) | (81) | |||||||
Repurchase of common stock | (10,246) | $ (1) | (10,245) | |||||
Issuance of common stock for share-based compensation plans (in shares) | 267 | |||||||
Issuance of common stock for stock compensation plans | (16,196) | $ 3 | (16,199) | |||||
Issuance of common stock under the employee stock purchase plan (in shares) | 24 | |||||||
Issuance of common stock under the employee stock purchase plan | 2,859 | $ 1 | 2,858 | |||||
Stock-based compensation | 30,698 | 30,698 | ||||||
Cash dividends declared ($0.03 per share) | (2,445) | (2,445) | ||||||
Other comprehensive income (loss) | 1,582 | 1,582 | ||||||
Net income (loss) | 37,291 | 37,291 | ||||||
Balance, end of period (in shares) at Jun. 30, 2021 | 81,456 | |||||||
Balance, end of period at Jun. 30, 2021 | 522,468 | $ 815 | 147,670 | 375,069 | (1,086) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Repurchase of common stock (in shares) | (96) | |||||||
Repurchase of common stock | (12,796) | $ (1) | (12,795) | |||||
Issuance of common stock for share-based compensation plans (in shares) | 286 | |||||||
Issuance of common stock for stock compensation plans | (18,114) | $ 3 | (18,117) | |||||
Issuance of common stock under the employee stock purchase plan (in shares) | 24 | |||||||
Issuance of common stock under the employee stock purchase plan | 2,639 | 2,639 | ||||||
Stock-based compensation | 28,701 | 28,701 | ||||||
Cash dividends declared ($0.03 per share) | (2,451) | (2,451) | ||||||
Other comprehensive income (loss) | (4,347) | (4,347) | ||||||
Net income (loss) | $ (56,468) | (56,468) | ||||||
Balance, end of period (in shares) at Sep. 30, 2021 | 81,670 | 81,670 | ||||||
Balance, end of period at Sep. 30, 2021 | $ 459,632 | $ 817 | $ 148,098 | $ 316,150 | $ (5,433) |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividend declared (in dollars per share) | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 | $ 0.03 |
UNAUDITED CONDENSED CONSOLIDA_7
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities | ||
Net (loss) | $ (25,794) | $ (65,379) |
Adjustments to reconcile net (loss) to cash (used in) operating activities | ||
Stock-based compensation | 89,483 | 76,755 |
Loss (gain) on capped call transactions | 7,543 | (19,816) |
Deferred income taxes | (53,638) | (43,476) |
Amortization of deferred commissions | 31,388 | 24,922 |
Amortization of debt discount and issuance costs | 2,025 | 10,405 |
Amortization of intangible assets and depreciation | 24,030 | 15,677 |
Amortization of investments | 2,916 | 252 |
Foreign currency transaction loss (gain) | 4,983 | (2,545) |
Other non-cash | (8,421) | 10,623 |
Change in operating assets and liabilities, net | (79,836) | (33,675) |
Cash (used in) operating activities | (5,321) | (26,257) |
Investing activities | ||
Purchases of investments | (67,170) | (190,319) |
Proceeds from maturities and called investments | 96,859 | 0 |
Sales of investments | 25,123 | 1,424 |
Payments for acquisitions, net of cash acquired | (4,993) | 0 |
Investment in property and equipment | (7,089) | (21,806) |
Cash provided by (used in) investing activities | 42,730 | (210,701) |
Financing activities | ||
Proceeds from issuance of convertible senior notes | 0 | 600,000 |
Purchase of capped calls related to convertible senior notes | 0 | (51,900) |
Payment of debt issuance costs | 0 | (14,527) |
Proceeds from employee stock purchase plan | 7,786 | 1,403 |
Dividend payments to stockholders | (7,310) | (7,206) |
Common stock repurchases | (91,907) | (78,140) |
Cash (used in) provided by financing activities | (91,431) | 449,630 |
Effect of exchange rate changes on cash and cash equivalents | (1,466) | 183 |
Net (decrease) increase in cash and cash equivalents | (55,488) | 212,855 |
Cash and cash equivalents, beginning of period | 171,899 | 68,363 |
Cash and cash equivalents, end of period | $ 116,411 | $ 281,218 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | NOTE 1. BASIS OF PRESENTATION Pegasystems Inc. (together with its subsidiaries, “the Company”) has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all the information required by accounting principles generally accepted in the United States of America (“U.S.”) for complete financial statements. These financial statements should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2020. In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited financial statements, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. All intercompany transactions and balances were eliminated in consolidation. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2021. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
NEW ACCOUNTING PRONOUNCEMENTS | NOTE 2. NEW ACCOUNTING PRONOUNCEMENTS Convertible debt In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a cash conversion feature. As a result, after adoption, entities will no longer separately present in stockholders’ equity an embedded conversion feature for such debt. Additionally, the debt discount resulting from separating the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, “Derivatives and Hedging”, or (2) a convertible debt instrument was issued at a substantial premium. The standard also requires the convertible instruments’ impact on diluted earnings per share (“EPS”) be determined using the if-converted method. The Company adopted ASU 2020-06 using the modified retrospective approach on January 1, 2021. Upon adoption, the book value of the Company’s Convertible Senior Notes (the “Notes”) increased by $69.5 million to $587.7 million, and retained earnings increased by $9.4 million. The retained earnings adjustment reflects the tax effected difference between the value of the Notes and the embedded conversion feature before adoption and the combined convertible instrument's amortized cost after adoption. See "Note 8. Debt" for additional information. |
MARKETABLE SECURITIES
MARKETABLE SECURITIES | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | NOTE 3. MARKETABLE SECURITIES September 30, 2021 December 31, 2020 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value Government debt $ 2,000 $ — $ — $ 2,000 $ 39,996 $ — $ (8) $ 39,988 Corporate debt 233,556 25 (144) 233,437 253,345 88 (152) 253,281 $ 235,556 $ 25 $ (144) $ 235,437 $ 293,341 $ 88 $ (160) $ 293,269 As of September 30, 2021, marketable securities’ maturities ranged from October 2021 to September 2024, with a weighted-average remaining maturity of 1.2 years. |
RECEIVABLES, CONTRACT ASSETS, A
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE | NOTE 4. RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE Receivables (in thousands) September 30, 2021 December 31, 2020 Accounts receivable $ 143,445 $ 215,827 Unbilled receivables 239,774 207,155 Long-term unbilled receivables 132,147 113,278 $ 515,366 $ 536,260 Unbilled receivables Unbilled receivables are client-committed amounts for which revenue recognition precedes billing, and billing is solely subject to the passage of time. Unbilled receivables by expected billing date: (Dollars in thousands) September 30, 2021 1 year or less $ 239,774 64 % 1-2 years 80,980 22 % 2-5 years 51,167 14 % $ 371,921 100 % Unbilled receivables by contract effective date: (Dollars in thousands) September 30, 2021 2021 $ 168,237 45 % 2020 109,904 29 % 2019 47,058 13 % 2018 22,169 6 % 2017 and prior 24,553 7 % $ 371,921 100 % Major clients Clients accounting for 10% or more of the Company’s total receivables: September 30, 2021 December 31, 2020 Client A 12 % * * Client accounted for less than 10% of total receivables. Contract assets Contract assets are client-committed amounts for which revenue recognized exceeds the amount billed to the client, and billing is subject to conditions other than the passage of time, such as completing a related performance obligation. (in thousands) September 30, 2021 December 31, 2020 Contract assets (1) $ 11,495 $ 15,296 Long-term contract assets (2) 8,485 7,777 $ 19,980 $ 23,073 (1) Included in other current assets. (2) Included in other long-term assets. Deferred revenue Deferred revenue consists of billings and payments received in advance of revenue recognition. (in thousands) September 30, 2021 December 31, 2020 Deferred revenue $ 229,103 $ 232,865 Long-term deferred revenue (1) 5,682 8,991 $ 234,785 $ 241,856 (1) Included in other long-term liabilities. The change in deferred revenue in the nine months ended September 30, 2021 was primarily due to new billings in advance of revenue recognition, offset by $212.0 million of revenue recognized that was included in deferred revenue as of December 31, 2020. |
DEFERRED COMMISSIONS
DEFERRED COMMISSIONS | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
DEFERRED COMMISSIONS | NOTE 5. DEFERRED COMMISSIONS (in thousands) September 30, 2021 December 31, 2020 Deferred commissions (1) $ 114,503 $ 108,624 (1) Included in other long-term assets. Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Amortization of deferred commissions (1) $ 10,186 $ 8,861 $ 31,388 $ 24,922 (1) Included in selling and marketing expense. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | NOTE 6. GOODWILL AND OTHER INTANGIBLES Goodwill Change in goodwill: Nine Months Ended (in thousands) 2021 January 1, $ 79,231 Acquisition 2,701 Currency translation adjustments 22 September 30, $ 81,954 Intangibles Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives. September 30, 2021 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,163 $ (56,988) $ 6,175 Technology 2-10 years 67,142 (58,273) 8,869 Other 1-5 years 5,361 (5,361) — $ 135,666 $ (120,622) $ 15,044 (1) Included in other long-term assets. December 31, 2020 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,168 $ (55,877) $ 7,291 Technology 2-10 years 64,843 (56,386) 8,457 Other 1-5 years 5,361 (5,361) — $ 133,372 $ (117,624) $ 15,748 (1) Included in other long-term assets. Amortization of intangible assets: Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Cost of revenue $ 629 $ 647 $ 1,887 $ 1,940 Selling and marketing 373 371 1,119 1,111 $ 1,002 $ 1,018 $ 3,006 $ 3,051 Future estimated intangibles assets amortization: (in thousands) September 30, 2021 2021 $ 981 2022 3,886 2023 3,618 2024 2,849 2025 2,509 2026 and thereafter 1,201 $ 15,044 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
LEASES | NOTE 7. LEASES Corporate headquarters In February 2021, the Company agreed to accelerate its exit from its corporate headquarters to October 1, 2021, in exchange for a one-time payment from our landlord of $18 million, which was amortized over the remaining lease term. The accelerated exit from this lease reduced our future lease liabilities by $21.1 million and accelerated corporate headquarters-related depreciation. On March 31, 2021 the Company leased office space at One Main Street, Cambridge, Massachusetts, to serve as its corporate headquarters. The 4.5 year lease includes a base rent of $2 million per year. New Waltham Office On July 6, 2021, the Company entered into an office space lease for 131 thousand square feet in Waltham, Massachusetts. The lease term of 11 years began on August 1, 2021. The annual rent equals the base rent plus a portion of building operating costs and real estate taxes. Rent first becomes payable on August 1, 2022. Base rent for the first year is approximately $6 million and will increase by 3 percent annually. In addition, the Company will receive an improvement allowance from the landlord of up to $11.8 million. This lease increased the Company’s lease liabilities and lease-related right of use assets by $42.1 million on August 1, 2021. Expense Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Fixed lease costs (1) $ (3,108) $ 5,172 $ (6,780) $ 14,933 Short-term lease costs 542 422 1,516 1,248 Variable lease costs 1,099 1,259 3,826 3,506 $ (1,467) $ 6,853 $ (1,438) $ 19,687 (1) The decrease in fixed lease costs in three and nine months ended September 30, 2021 was due to the modification of the corporate headquarters lease. Right of use assets and lease liabilities (in thousands) September 30, 2021 December 31, 2020 Right of use assets (1) $ 91,349 $ 67,651 Operating lease liabilities (2) $ 10,668 $ 18,541 Long-term operating lease liabilities $ 87,088 $ 59,053 (1) Represents the Company’s right to use the leased asset during the lease term. Included in other long-term assets. (2) Included in other current liabilities. Weighted-average remaining lease term and discount rate for the Company’s leases were: September 30, 2021 December 31, 2020 Weighted-average remaining lease term 7.8 years 4.7 years Weighted-average discount rate (1) 4.4 % 5.4 % (1) The rates implicit in most of the Company’s leases are not readily determinable. Therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the lease term in a similar economic environment. Maturities of lease liabilities: (in thousands) September 30, 2021 Remainder of 2021 $ 961 2022 9,948 2023 19,607 2024 16,482 2025 13,607 2026 9,866 Thereafter 48,515 Total lease payments 118,986 Less: imputed interest (1) (21,230) $ 97,756 (1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement unless the discount rate is updated due to a lease reassessment event. Cash flow information Nine Months Ended (in thousands) 2021 2020 Cash paid for leases $ 14,403 $ 15,503 Right of use assets recognized for new leases and amendments (non-cash) $ 54,716 $ 24,276 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8. DEBT Convertible senior notes and capped calls Convertible senior notes In February 2020, the Company issued Convertible Senior Notes (the "Notes") with an aggregate principal of $600 million, due March 1, 2025, in a private placement. No principal payments are due before maturity. The Notes accrue interest at an annual rate of 0.75%, payable semi-annually in arrears on March 1 and September 1, beginning on September 1, 2020. Conversion rights The conversion rate is 7.4045 shares of common stock per $1,000 principal amount of the Notes, representing an initial conversion price of $135.05 per share of common stock. The Company will settle conversions by paying or delivering cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company’s election, based on the applicable conversion rate. The conversion rate will be adjusted upon certain events, including spin-offs, tender offers, exchange offers, and certain stockholder distributions. Beginning on September 1, 2024, noteholders may convert their Notes at any time at their election. Before September 1, 2024, noteholders may convert their Notes in the following circumstances: • During any calendar quarter beginning after June 30, 2020 (and only during such calendar quarter), if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. • During the five consecutive business days immediately after any five consecutive trading day period (the “Measurement Period”), if the trading price per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price per share of common stock on such trading day and the conversion rate on such trading day. • Upon certain corporate events or distributions or if the Company calls any Notes for redemption, noteholders may convert before the close of business on the business day immediately before the related redemption date (or, if the Company fails to pay the redemption price in full on the redemption date, until the Company pays the redemption price). As of September 30, 2021, the Notes were not eligible for conversion. Repurchase rights On or after March 1, 2023 and on or before the 40th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the Notes at a repurchase price equal to 100% of the principal amount, plus accrued and unpaid interest, if the last reported sale price of the Company’s common stock exceeded 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides a redemption notice. If certain corporate events that constitute a “Fundamental Change” occur, each noteholder will have the right to require the Company to repurchase for cash all of such noteholder’s Notes, or any portion of the principal thereof that is equal to $1,000 or a multiple of $1,000, at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest. A Fundamental Change relates to mergers, changes in control of the Company, liquidation/dissolution of the Company, or the delisting of the Company’s common stock. Impact of the Notes The Company adopted ASU 2020-06 using the modified retrospective approach on January 1, 2021. The standard eliminates the liability and equity separation model for convertible instruments with a cash conversion feature. See "Note 2. New Accounting Pronouncements" for additional information. Until January 1, 2021, the Notes were separated into liability and equity components. • The initial carrying amount of the liability component was calculated by measuring a similar debt instrument’s fair value that does not have an associated conversion feature. The excess of the Notes’ principal amount over the initial carrying amount of the liability component, the debt discount, was amortized as interest expense over the Notes’ contractual term. • The equity component was recorded as an increase to additional paid-in capital and not remeasured. Upon adoption of ASU 2020-06, the book value of the Notes increased by $69.5 million to $587.7 million, and retained earnings increased by $9.4 million. The retained earnings adjustment reflects the tax effected difference between the value of the Notes and the embedded conversion feature before adoption and the combined convertible instrument's amortized cost after adoption. Carrying value of the Notes: (in thousands) September 30, 2021 December 31, 2020 Principal $ 600,000 $ 600,000 Unamortized debt discount — (71,222) Unamortized issuance costs (10,231) (10,575) Convertible senior notes, net $ 589,769 $ 518,203 Conversion options $ — $ 84,120 Issuance costs — (2,037) Deferred taxes — (20,479) Additional paid-in capital $ — $ 61,604 Interest expense related to the Notes: Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Contractual interest expense (0.75% coupon) $ 1,125 $ 1,125 $ 3,375 $ 2,700 Amortization of debt discount — 3,807 — 9,060 Amortization of issuance costs 677 565 2,025 1,345 $ 1,802 $ 5,497 $ 5,400 $ 13,105 The effective interest rate for the Notes: Nine Months Ended 2021 2020 Weighted-average effective interest rate 1.2 % 4.3 % Future payments of principal and contractual interest: September 30, 2021 (in thousands) Principal Interest Total Remainder of 2021 $ — $ — $ — 2022 — 4,500 4,500 2023 — 4,500 4,500 2024 — 4,500 4,500 2025 600,000 1,488 601,488 $ 600,000 $ 14,988 $ 614,988 Capped call transactions In February 2020, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions cover 4.4 million shares (representing the number of shares for which the Notes are initially convertible) of the Company’s common stock. The Capped Call Transactions are expected to reduce common stock dilution and/or offset any potential cash payments the Company must make, other than for principal and interest, upon conversion of the Notes, with such reduction and/or offset subject to a cap of $196.44. The cap price of the Capped Call Transactions is subject to adjustment upon the occurrence of specified extraordinary events affecting the Company, including mergers and tender offers. The Capped Call Transactions are accounted for as derivative instruments and do not qualify for the Company’s own equity scope exception in ASC 815 since, in some cases of early settlement, the settlement value of the Capped Call Transactions, calculated following the governing documents, may not represent a fair value measurement. The Capped Call Transactions are classified as other long-term assets and remeasured to fair value at the end of each reporting period, resulting in a non-operating gain or loss. Change in capped call transactions: Nine Months Ended (in thousands) 2021 2020 January 1, $ 83,597 $ — Issuance — 51,900 Fair value adjustment (7,543) 19,816 September 30, $ 76,054 $ 71,716 Credit facility In November 2019, and as amended as of February 2020, July 2020, and September 2020, the Company entered into a five-year $100 million senior secured revolving credit agreement (the “Credit Facility”) with PNC Bank, National Association. The Company may use borrowings to finance working capital needs and for general corporate purposes. Subject to specific conditions, the Credit Facility allows the Company to increase the aggregate commitment to $200 million. The commitments expire on November 4, 2024, and any outstanding loans will be payable on such date. The Credit Facility, as amended, contains customary covenants, including, but not limited to, those relating to additional indebtedness, liens, asset divestitures, and affiliate transactions. The Company is also required to comply with financial covenants, including: • Beginning with the fiscal quarter ended September 30, 2020 and ending with the fiscal quarter ended December 31, 2021, at least $200 million in cash and investments held by Pegasystems Inc. • Beginning with the quarter ended March 31, 2022, a maximum net consolidated leverage ratio of 3.5 to 1.0 (with a step-up in the event of certain acquisitions) and a minimum consolidated interest coverage ratio of 3.5 to 1.0. As of September 30, 2021 and December 31, 2020, the Company had no outstanding borrowings under the Credit Facility. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 9. FAIR VALUE MEASUREMENTS Assets and liabilities measured at fair value on a recurring basis The Company records its cash equivalents, marketable securities, Capped Call Transactions, and venture investments at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: • Level 1 - observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2 - significant other inputs that are observable either directly or indirectly; and • Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and minimize unobservable inputs when determining fair value. The fair value of the Capped Call Transactions at the end of each reporting period is determined using a Black-Scholes option-pricing model. The valuation models use various market-based inputs, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield. The Company applies judgment when determining expected volatility. The Company considers both historical and implied volatility levels of the underlying equity security. The Company’s venture investments are recorded at fair value based on valuation methods, including observable public companies and transaction prices and unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. Assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents $ 11,087 $ — $ — $ 11,087 $ 42,339 $ 14,000 $ — $ 56,339 Marketable securities $ — $ 235,437 $ — $ 235,437 $ — $ 293,269 $ — $ 293,269 Capped Call Transactions (1) $ — $ 76,054 $ — $ 76,054 $ — $ 83,597 $ — $ 83,597 Venture investments (1) (2) $ — $ — $ 9,713 $ 9,713 $ — $ — $ 8,345 $ 8,345 (1) Included in other long-term assets. (2) Investments in privately-held companies. Changes in venture investments: Nine Months Ended (in thousands) 2021 2020 January 1, $ 8,345 $ 4,871 New investments 500 3,006 Sales of investments (400) (1,424) Changes in foreign exchange rates (52) — Changes in fair value: included in other income 100 1,374 included in other comprehensive income 1,220 100 September 30, $ 9,713 $ 7,927 The carrying value of certain other financial instruments, including receivables and accounts payable, approximates fair value due to these items’ short maturity. Fair value of the Notes The Notes’ fair value (inclusive of the conversion feature embedded in the Notes) was $676.2 million as of September 30, 2021 and $706.5 million as of December 31, 2020. The fair value was determined based on the Notes’ quoted price in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy. See "Note 8. Debt" for additional information. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 10. REVENUE Geographic revenue Three Months Ended Nine Months Ended (Dollars in thousands) 2021 2020 2021 2020 U.S. $ 132,016 52 % $ 120,971 53 % $ 515,881 58 % $ 436,199 61 % Other Americas 17,510 7 % 10,737 5 % 43,469 5 % 35,009 5 % United Kingdom (“U.K.”) 25,982 10 % 25,150 11 % 86,747 10 % 68,246 9 % Europe (excluding U.K.), Middle East, and Africa 46,306 18 % 39,656 18 % 143,763 15 % 106,472 15 % Asia-Pacific 34,454 13 % 29,437 13 % 105,609 12 % 72,991 10 % $ 256,268 100 % $ 225,951 100 % $ 895,469 100 % $ 718,917 100 % Revenue streams Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Pega Cloud $ 78,369 $ 54,776 $ 219,520 $ 147,080 Maintenance 83,188 74,670 237,531 220,587 Consulting 56,416 56,721 166,270 164,227 Revenue recognized over time 217,973 186,167 623,321 531,894 Perpetual license 2,874 3,852 20,922 16,568 Term license 35,421 35,932 251,226 170,455 Revenue recognized at a point in time 38,295 39,784 272,148 187,023 $ 256,268 $ 225,951 $ 895,469 $ 718,917 (in thousands) Three Months Ended Nine Months Ended 2021 2020 2021 2020 Pega Cloud $ 78,369 $ 54,776 $ 219,520 $ 147,080 Client Cloud 118,609 110,602 488,757 391,042 Maintenance 83,188 74,670 237,531 220,587 Term license 35,421 35,932 251,226 170,455 Cloud subscription (1) 196,978 165,378 708,277 538,122 Perpetual license 2,874 3,852 20,922 16,568 Consulting 56,416 56,721 166,270 164,227 $ 256,268 $ 225,951 $ 895,469 $ 718,917 (1) Reflects client arrangements subject to renewal (Pega Cloud, maintenance, and term license). Remaining performance obligations ("Backlog") Expected future revenue from existing non-cancellable contracts: As of September 30, 2021: Pega Cloud Client Cloud Consulting Total (Dollars in thousands) Maintenance Term license Perpetual license 1 year or less $ 284,359 $ 196,667 $ 49,265 $ 15,686 $ 31,673 $ 577,650 56 % 1-2 years 177,214 59,360 16,872 1,064 6,561 261,071 25 % 2-3 years 79,775 37,734 420 4,094 5,165 127,188 12 % Greater than 3 years 30,113 33,935 245 2,127 1,697 68,117 7 % $ 571,461 $ 327,696 $ 66,802 $ 22,971 $ 45,096 $ 1,034,026 100 % As of September 30, 2020: Pega Cloud Client Cloud Consulting Total (Dollars in thousands) Maintenance Term license Perpetual license 1 year or less $ 211,661 $ 170,643 $ 50,788 $ 8,708 $ 14,977 $ 456,777 54 % 1-2 years 157,500 40,631 5,341 1,700 2,042 207,214 25 % 2-3 years 93,283 18,277 7,052 — 770 119,382 14 % Greater than 3 years 44,363 9,597 4 — 653 54,617 7 % $ 506,807 $ 239,148 $ 63,185 $ 10,408 $ 18,442 $ 837,990 100 % |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 11. STOCK-BASED COMPENSATION Expense Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Cost of revenue $ 5,114 $ 5,100 $ 16,889 $ 15,636 Selling and marketing 13,376 12,658 41,844 33,968 Research and development 6,231 5,765 19,343 17,066 General and administrative 3,974 4,402 11,407 10,085 $ 28,695 $ 27,925 $ 89,483 $ 76,755 Income tax benefit $ (5,845) $ (5,604) $ (18,028) $ (15,293) As of September 30, 2021, the Company had $131.7 million of unrecognized stock-based compensation expense, net of estimated forfeitures, which is expected to be recognized over a weighted-average period of 2.1 years. Grants Nine Months Ended (in thousands) Shares Total Fair Value Restricted stock units 819 $ 106,286 Non-qualified stock options 1,472 $ 55,643 Common stock 5 $ 601 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12. INCOME TAXES Effective income tax rate Three Months Ended Nine Months Ended (Dollars in thousands) 2021 2020 2021 2020 (Benefit from) income taxes $ (24,826) $ (25,053) $ (54,360) $ (61,182) Effective income tax benefit rate 68 % 48 % The change in the effective income tax benefit rate was primarily due to the impact of discrete tax items on a proportionately larger (loss) before income taxes in the nine months ended September 30, 2020. The most significant discrete items were excess tax benefits from stock-based compensation and the impact of changes in statutory tax rates applicable to our U.K.-based deferred tax assets. As of September 30, 2021 and December 31, 2020, the Company’s deferred tax assets were $157.9 million and $88.1 million, respectively. |
(LOSS) PER SHARE
(LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
(LOSS) PER SHARE | NOTE 13. (LOSS) PER SHARE Basic (loss) per share is calculated using the weighted-average number of common shares outstanding during the period. Diluted (loss) per share is calculated using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options, RSUs, and convertible senior notes. Calculation of (loss) per share: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2021 2020 2021 2020 Net (loss) $ (56,468) $ (19,267) $ (25,794) $ (65,379) Weighted-average common shares outstanding 81,526 80,537 81,284 80,191 (Loss) per share, basic $ (0.69) $ (0.24) $ (0.32) $ (0.82) Net (loss) $ (56,468) $ (19,267) $ (25,794) $ (65,379) Weighted-average common shares outstanding, assuming dilution (1) (2) (3) 81,526 80,537 81,284 80,191 (Loss) per share, diluted $ (0.69) $ (0.24) $ (0.32) $ (0.82) Outstanding anti-dilutive stock options and RSUs (4) 5,815 6,622 6,136 6,166 (1) The shares underlying the conversion options in the Company’s Notes are included using the if-converted method, if dilutive in the period. If the outstanding conversion options were fully exercised, the Company would issue an additional 4.4 million shares. (2) In periods of loss, all dilutive securities are excluded as their inclusion would be anti-dilutive. (3) The Company’s Capped Call Transactions convert to 4.4 million shares of the Company’s common stock (representing the number of shares for which the Notes are initially convertible). The Capped Call Transactions are expected to reduce common stock dilution and/or offset any potential cash payments the Company must make, other than for principal and interest, upon conversion of the Notes, with such reduction and/or offset subject to a cap of $196.44. The Capped Call Transactions are excluded from weighted-average common shares outstanding, assuming dilution, in all periods as their effect would be anti-dilutive. (4) Outstanding stock options and RSUs that were anti-dilutive under the treasury stock method in the period were excluded from the computation of diluted (loss) per share. These awards may be dilutive in the future. |
NEW ACCOUNTING PRONOUNCEMENTS (
NEW ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Pegasystems Inc. (together with its subsidiaries, “the Company”) has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all the information required by accounting principles generally accepted in the United States of America (“U.S.”) for complete financial statements. These financial statements should be read in conjunction with the Company’s audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2020. In the opinion of management, the Company has prepared the accompanying unaudited condensed consolidated financial statements on the same basis as its audited financial statements, and these financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of the interim periods presented. All intercompany transactions and balances were eliminated in consolidation. The operating results for the interim periods presented are not necessarily indicative of the results expected for the full year 2021. |
New accounting pronouncements | Convertible debt In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. The standard eliminates the liability and equity separation model for convertible instruments with a cash conversion feature. As a result, after adoption, entities will no longer separately present in stockholders’ equity an embedded conversion feature for such debt. Additionally, the debt discount resulting from separating the embedded conversion feature will no longer be amortized into income as interest expense over the instrument’s life. Instead, entities will account for a convertible debt instrument wholly as debt unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC Topic 815, “Derivatives and Hedging”, or (2) a convertible debt instrument was issued at a substantial premium. The standard also requires the convertible instruments’ impact on diluted earnings per share (“EPS”) be determined using the if-converted method. The Company adopted ASU 2020-06 using the modified retrospective approach on January 1, 2021. Upon adoption, the book value of the Company’s Convertible Senior Notes (the “Notes”) increased by $69.5 million to $587.7 million, and retained earnings increased by $9.4 million. The retained earnings adjustment reflects the tax effected difference between the value of the Notes and the embedded conversion feature before adoption and the combined convertible instrument's amortized cost after adoption. |
Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis The Company records its cash equivalents, marketable securities, Capped Call Transactions, and venture investments at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants based on assumptions that market participants would use in pricing an asset or liability. As a basis for classifying the fair value measurements, a three-tier fair value hierarchy, which classifies the fair value measurements based on the inputs used in measuring fair value, was established as follows: • Level 1 - observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2 - significant other inputs that are observable either directly or indirectly; and • Level 3 - significant unobservable inputs on which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and minimize unobservable inputs when determining fair value. The fair value of the Capped Call Transactions at the end of each reporting period is determined using a Black-Scholes option-pricing model. The valuation models use various market-based inputs, including stock price, remaining contractual term, expected volatility, risk-free interest rate, and expected dividend yield. The Company applies judgment when determining expected volatility. The Company considers both historical and implied volatility levels of the underlying equity security. The Company’s venture investments are recorded at fair value based on valuation methods, including observable public companies and transaction prices and unobservable inputs, including the volatility, rights, and obligations of the securities the Company holds. |
MARKETABLE SECURITIES (Tables)
MARKETABLE SECURITIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of marketable securities | September 30, 2021 December 31, 2020 (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value Government debt $ 2,000 $ — $ — $ 2,000 $ 39,996 $ — $ (8) $ 39,988 Corporate debt 233,556 25 (144) 233,437 253,345 88 (152) 253,281 $ 235,556 $ 25 $ (144) $ 235,437 $ 293,341 $ 88 $ (160) $ 293,269 |
RECEIVABLES, CONTRACT ASSETS,_2
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Summary of receivables | Receivables (in thousands) September 30, 2021 December 31, 2020 Accounts receivable $ 143,445 $ 215,827 Unbilled receivables 239,774 207,155 Long-term unbilled receivables 132,147 113,278 $ 515,366 $ 536,260 |
Summary of unbilled receivables | Unbilled receivables by expected billing date: (Dollars in thousands) September 30, 2021 1 year or less $ 239,774 64 % 1-2 years 80,980 22 % 2-5 years 51,167 14 % $ 371,921 100 % |
Summary of unbilled receivables based upon contract effective date | Unbilled receivables by contract effective date: (Dollars in thousands) September 30, 2021 2021 $ 168,237 45 % 2020 109,904 29 % 2019 47,058 13 % 2018 22,169 6 % 2017 and prior 24,553 7 % $ 371,921 100 % |
Schedules of concentration of risk, by risk factor | Clients accounting for 10% or more of the Company’s total receivables: September 30, 2021 December 31, 2020 Client A 12 % * * Client accounted for less than 10% of total receivables. |
Summary of contract assets and deferred revenue | Contract assets Contract assets are client-committed amounts for which revenue recognized exceeds the amount billed to the client, and billing is subject to conditions other than the passage of time, such as completing a related performance obligation. (in thousands) September 30, 2021 December 31, 2020 Contract assets (1) $ 11,495 $ 15,296 Long-term contract assets (2) 8,485 7,777 $ 19,980 $ 23,073 (1) Included in other current assets. (2) Included in other long-term assets. Deferred revenue Deferred revenue consists of billings and payments received in advance of revenue recognition. (in thousands) September 30, 2021 December 31, 2020 Deferred revenue $ 229,103 $ 232,865 Long-term deferred revenue (1) 5,682 8,991 $ 234,785 $ 241,856 (1) Included in other long-term liabilities. |
DEFERRED COMMISSIONS (Tables)
DEFERRED COMMISSIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of impairment of deferred contract costs | (in thousands) September 30, 2021 December 31, 2020 Deferred commissions (1) $ 114,503 $ 108,624 |
Schedule of amortization of deferred contract costs | Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Amortization of deferred commissions (1) $ 10,186 $ 8,861 $ 31,388 $ 24,922 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in carrying amount of goodwill | Change in goodwill: Nine Months Ended (in thousands) 2021 January 1, $ 79,231 Acquisition 2,701 Currency translation adjustments 22 September 30, $ 81,954 |
Schedule of amortizable intangible assets | Intangible assets are recorded at cost and amortized using the straight-line method over their estimated useful lives. September 30, 2021 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,163 $ (56,988) $ 6,175 Technology 2-10 years 67,142 (58,273) 8,869 Other 1-5 years 5,361 (5,361) — $ 135,666 $ (120,622) $ 15,044 (1) Included in other long-term assets. December 31, 2020 (in thousands) Useful Lives Cost Accumulated Amortization Net Book Value (1) Client-related 4-10 years $ 63,168 $ (55,877) $ 7,291 Technology 2-10 years 64,843 (56,386) 8,457 Other 1-5 years 5,361 (5,361) — $ 133,372 $ (117,624) $ 15,748 (1) Included in other long-term assets. |
Amortization expense of acquired intangibles | Amortization of intangible assets: Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Cost of revenue $ 629 $ 647 $ 1,887 $ 1,940 Selling and marketing 373 371 1,119 1,111 $ 1,002 $ 1,018 $ 3,006 $ 3,051 |
Estimated future amortization expense related to intangible assets | Future estimated intangibles assets amortization: (in thousands) September 30, 2021 2021 $ 981 2022 3,886 2023 3,618 2024 2,849 2025 2,509 2026 and thereafter 1,201 $ 15,044 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of lease expense | Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Fixed lease costs (1) $ (3,108) $ 5,172 $ (6,780) $ 14,933 Short-term lease costs 542 422 1,516 1,248 Variable lease costs 1,099 1,259 3,826 3,506 $ (1,467) $ 6,853 $ (1,438) $ 19,687 |
Schedule of right of use asset and lease liabilities | (in thousands) September 30, 2021 December 31, 2020 Right of use assets (1) $ 91,349 $ 67,651 Operating lease liabilities (2) $ 10,668 $ 18,541 Long-term operating lease liabilities $ 87,088 $ 59,053 (1) Represents the Company’s right to use the leased asset during the lease term. Included in other long-term assets. (2) Included in other current liabilities. |
Schedule of weighted average and discount rate | Weighted-average remaining lease term and discount rate for the Company’s leases were: September 30, 2021 December 31, 2020 Weighted-average remaining lease term 7.8 years 4.7 years Weighted-average discount rate (1) 4.4 % 5.4 % (1) The rates implicit in most of the Company’s leases are not readily determinable. Therefore, the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur to borrow an amount equal to the lease payments on a collateralized basis over the lease term in a similar economic environment. |
Schedule of lease maturities after adoption of 842 | Maturities of lease liabilities: (in thousands) September 30, 2021 Remainder of 2021 $ 961 2022 9,948 2023 19,607 2024 16,482 2025 13,607 2026 9,866 Thereafter 48,515 Total lease payments 118,986 Less: imputed interest (1) (21,230) $ 97,756 (1) Lease liabilities are measured at the present value of the remaining lease payments using a discount rate determined at lease commencement unless the discount rate is updated due to a lease reassessment event. |
Schedule of supplemental cash flow lease information | Nine Months Ended (in thousands) 2021 2020 Cash paid for leases $ 14,403 $ 15,503 Right of use assets recognized for new leases and amendments (non-cash) $ 54,716 $ 24,276 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Contractual obligation, fiscal year maturity schedule | Carrying value of the Notes: (in thousands) September 30, 2021 December 31, 2020 Principal $ 600,000 $ 600,000 Unamortized debt discount — (71,222) Unamortized issuance costs (10,231) (10,575) Convertible senior notes, net $ 589,769 $ 518,203 Conversion options $ — $ 84,120 Issuance costs — (2,037) Deferred taxes — (20,479) Additional paid-in capital $ — $ 61,604 Interest expense related to the Notes: Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Contractual interest expense (0.75% coupon) $ 1,125 $ 1,125 $ 3,375 $ 2,700 Amortization of debt discount — 3,807 — 9,060 Amortization of issuance costs 677 565 2,025 1,345 $ 1,802 $ 5,497 $ 5,400 $ 13,105 The effective interest rate for the Notes: Nine Months Ended 2021 2020 Weighted-average effective interest rate 1.2 % 4.3 % Future payments of principal and contractual interest: September 30, 2021 (in thousands) Principal Interest Total Remainder of 2021 $ — $ — $ — 2022 — 4,500 4,500 2023 — 4,500 4,500 2024 — 4,500 4,500 2025 600,000 1,488 601,488 $ 600,000 $ 14,988 $ 614,988 |
Schedule of derivative instruments | Change in capped call transactions: Nine Months Ended (in thousands) 2021 2020 January 1, $ 83,597 $ — Issuance — 51,900 Fair value adjustment (7,543) 19,816 September 30, $ 76,054 $ 71,716 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value | Assets and liabilities measured at fair value on a recurring basis: September 30, 2021 December 31, 2020 (in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Cash equivalents $ 11,087 $ — $ — $ 11,087 $ 42,339 $ 14,000 $ — $ 56,339 Marketable securities $ — $ 235,437 $ — $ 235,437 $ — $ 293,269 $ — $ 293,269 Capped Call Transactions (1) $ — $ 76,054 $ — $ 76,054 $ — $ 83,597 $ — $ 83,597 Venture investments (1) (2) $ — $ — $ 9,713 $ 9,713 $ — $ — $ 8,345 $ 8,345 (1) Included in other long-term assets. (2) Investments in privately-held companies. |
Fair value, assets measured on recurring basis, unobservable input reconciliation | Changes in venture investments: Nine Months Ended (in thousands) 2021 2020 January 1, $ 8,345 $ 4,871 New investments 500 3,006 Sales of investments (400) (1,424) Changes in foreign exchange rates (52) — Changes in fair value: included in other income 100 1,374 included in other comprehensive income 1,220 100 September 30, $ 9,713 $ 7,927 |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue by geographic location | Geographic revenue Three Months Ended Nine Months Ended (Dollars in thousands) 2021 2020 2021 2020 U.S. $ 132,016 52 % $ 120,971 53 % $ 515,881 58 % $ 436,199 61 % Other Americas 17,510 7 % 10,737 5 % 43,469 5 % 35,009 5 % United Kingdom (“U.K.”) 25,982 10 % 25,150 11 % 86,747 10 % 68,246 9 % Europe (excluding U.K.), Middle East, and Africa 46,306 18 % 39,656 18 % 143,763 15 % 106,472 15 % Asia-Pacific 34,454 13 % 29,437 13 % 105,609 12 % 72,991 10 % $ 256,268 100 % $ 225,951 100 % $ 895,469 100 % $ 718,917 100 % |
Schedule of revenue streams | Revenue streams Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Pega Cloud $ 78,369 $ 54,776 $ 219,520 $ 147,080 Maintenance 83,188 74,670 237,531 220,587 Consulting 56,416 56,721 166,270 164,227 Revenue recognized over time 217,973 186,167 623,321 531,894 Perpetual license 2,874 3,852 20,922 16,568 Term license 35,421 35,932 251,226 170,455 Revenue recognized at a point in time 38,295 39,784 272,148 187,023 $ 256,268 $ 225,951 $ 895,469 $ 718,917 (in thousands) Three Months Ended Nine Months Ended 2021 2020 2021 2020 Pega Cloud $ 78,369 $ 54,776 $ 219,520 $ 147,080 Client Cloud 118,609 110,602 488,757 391,042 Maintenance 83,188 74,670 237,531 220,587 Term license 35,421 35,932 251,226 170,455 Cloud subscription (1) 196,978 165,378 708,277 538,122 Perpetual license 2,874 3,852 20,922 16,568 Consulting 56,416 56,721 166,270 164,227 $ 256,268 $ 225,951 $ 895,469 $ 718,917 (1) Reflects client arrangements subject to renewal (Pega Cloud, maintenance, and term license). |
Revenue for remaining performance obligations expected to be recognized | Expected future revenue from existing non-cancellable contracts: As of September 30, 2021: Pega Cloud Client Cloud Consulting Total (Dollars in thousands) Maintenance Term license Perpetual license 1 year or less $ 284,359 $ 196,667 $ 49,265 $ 15,686 $ 31,673 $ 577,650 56 % 1-2 years 177,214 59,360 16,872 1,064 6,561 261,071 25 % 2-3 years 79,775 37,734 420 4,094 5,165 127,188 12 % Greater than 3 years 30,113 33,935 245 2,127 1,697 68,117 7 % $ 571,461 $ 327,696 $ 66,802 $ 22,971 $ 45,096 $ 1,034,026 100 % As of September 30, 2020: Pega Cloud Client Cloud Consulting Total (Dollars in thousands) Maintenance Term license Perpetual license 1 year or less $ 211,661 $ 170,643 $ 50,788 $ 8,708 $ 14,977 $ 456,777 54 % 1-2 years 157,500 40,631 5,341 1,700 2,042 207,214 25 % 2-3 years 93,283 18,277 7,052 — 770 119,382 14 % Greater than 3 years 44,363 9,597 4 — 653 54,617 7 % $ 506,807 $ 239,148 $ 63,185 $ 10,408 $ 18,442 $ 837,990 100 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock based compensation expense | Expense Three Months Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Cost of revenue $ 5,114 $ 5,100 $ 16,889 $ 15,636 Selling and marketing 13,376 12,658 41,844 33,968 Research and development 6,231 5,765 19,343 17,066 General and administrative 3,974 4,402 11,407 10,085 $ 28,695 $ 27,925 $ 89,483 $ 76,755 Income tax benefit $ (5,845) $ (5,604) $ (18,028) $ (15,293) |
Summary of stock based compensation award granted | Grants Nine Months Ended (in thousands) Shares Total Fair Value Restricted stock units 819 $ 106,286 Non-qualified stock options 1,472 $ 55,643 Common stock 5 $ 601 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Summary of benefit from income taxes and discrete tax items | Effective income tax rate Three Months Ended Nine Months Ended (Dollars in thousands) 2021 2020 2021 2020 (Benefit from) income taxes $ (24,826) $ (25,053) $ (54,360) $ (61,182) Effective income tax benefit rate 68 % 48 % |
(LOSS) PER SHARE (Tables)
(LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Summary of basic and diluted earnings per share | Calculation of (loss) per share: Three Months Ended Nine Months Ended (in thousands, except per share amounts) 2021 2020 2021 2020 Net (loss) $ (56,468) $ (19,267) $ (25,794) $ (65,379) Weighted-average common shares outstanding 81,526 80,537 81,284 80,191 (Loss) per share, basic $ (0.69) $ (0.24) $ (0.32) $ (0.82) Net (loss) $ (56,468) $ (19,267) $ (25,794) $ (65,379) Weighted-average common shares outstanding, assuming dilution (1) (2) (3) 81,526 80,537 81,284 80,191 (Loss) per share, diluted $ (0.69) $ (0.24) $ (0.32) $ (0.82) Outstanding anti-dilutive stock options and RSUs (4) 5,815 6,622 6,136 6,166 (1) The shares underlying the conversion options in the Company’s Notes are included using the if-converted method, if dilutive in the period. If the outstanding conversion options were fully exercised, the Company would issue an additional 4.4 million shares. (2) In periods of loss, all dilutive securities are excluded as their inclusion would be anti-dilutive. (3) The Company’s Capped Call Transactions convert to 4.4 million shares of the Company’s common stock (representing the number of shares for which the Notes are initially convertible). The Capped Call Transactions are expected to reduce common stock dilution and/or offset any potential cash payments the Company must make, other than for principal and interest, upon conversion of the Notes, with such reduction and/or offset subject to a cap of $196.44. The Capped Call Transactions are excluded from weighted-average common shares outstanding, assuming dilution, in all periods as their effect would be anti-dilutive. (4) Outstanding stock options and RSUs that were anti-dilutive under the treasury stock method in the period were excluded from the computation of diluted (loss) per share. These awards may be dilutive in the future. |
NEW ACCOUNTING PRONOUNCEMENTS_2
NEW ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Convertible senior notes, net | $ 589,769 | $ 518,203 | |||||||
Impact of ASU adoption | 459,632 | $ 522,468 | $ 478,925 | 542,172 | $ 529,322 | $ 556,282 | $ 566,611 | $ 539,010 | |
Accounting Standards Update 2020-06 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Convertible senior notes, net | $ 587,700 | ||||||||
Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Impact of ASU adoption | $ 316,150 | $ 375,069 | $ 340,223 | 339,879 | $ 338,300 | $ 359,989 | $ 383,142 | $ 410,919 | |
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Impact of ASU adoption | (52,205) | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Convertible senior notes, net | $ 69,500 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Impact of ASU adoption | 9,399 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Accounting Standards Update 2020-06 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Impact of ASU adoption | $ 9,400 |
MARKETABLE SECURITIES - Schedul
MARKETABLE SECURITIES - Schedule of Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 235,556 | $ 293,341 |
Unrealized Gains | 25 | 88 |
Unrealized Losses | (144) | (160) |
Fair Value | 235,437 | 293,269 |
Government debt | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 2,000 | 39,996 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | (8) |
Fair Value | 2,000 | 39,988 |
Corporate debt | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 233,556 | 253,345 |
Unrealized Gains | 25 | 88 |
Unrealized Losses | (144) | (152) |
Fair Value | $ 233,437 | $ 253,281 |
MARKETABLE SECURITIES - Additio
MARKETABLE SECURITIES - Additional Information (Details) | Sep. 30, 2021 |
Investments, Debt and Equity Securities [Abstract] | |
Marketable debt security weighted-average remaining maturity | 1 year 2 months 12 days |
RECEIVABLES, CONTRACT ASSETS,_3
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Accounts receivable | $ 143,445 | $ 215,827 |
Unbilled receivables | 239,774 | 207,155 |
Long-term unbilled receivables | 132,147 | 113,278 |
Total receivables | $ 515,366 | $ 536,260 |
RECEIVABLES, CONTRACT ASSETS,_4
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Unbilled Receivables (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Receivables [Abstract] | |
1 year or less | $ 239,774 |
1-2 years | 80,980 |
2-5 years | 51,167 |
Total | $ 371,921 |
Percentage of unbilled receivables, 1 year or less | 64.00% |
Percentage of unbilled receivables, 1-2 years | 22.00% |
Percentage of unbilled receivables, 2-5 years | 14.00% |
Total percentage of unbilled receivables | 100.00% |
RECEIVABLES, CONTRACT ASSETS,_5
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE- Contract Effective (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Receivables [Abstract] | |
2021 | $ 168,237 |
2020 | 109,904 |
2019 | 47,058 |
2018 | 22,169 |
2017 and prior | 24,553 |
Unbilled revenue total | $ 371,921 |
2021 | 45.00% |
2020 | 29.00% |
2019 | 13.00% |
2018 | 6.00% |
2017 and prior | 7.00% |
Total percentage of unbilled revenue | 100.00% |
RECEIVABLES, CONTRACT ASSETS,_6
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Major Clients (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Concentration Risk [Line Items] | ||||
Percent of total revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Client A | Credit concentration risk | Accounts receivable | ||||
Concentration Risk [Line Items] | ||||
Percent of total revenue | 12.00% |
RECEIVABLES, CONTRACT ASSETS,_7
RECEIVABLES, CONTRACT ASSETS, AND DEFERRED REVENUE - Summary of Contract Assets and Deferred Revenue (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Contract assets | $ 11,495 | $ 15,296 |
Long-term contract assets | 8,485 | 7,777 |
Total contract assets | 19,980 | 23,073 |
Deferred revenue | 229,103 | 232,865 |
Long-term deferred revenue | 5,682 | 8,991 |
Total deferred revenue | 234,785 | $ 241,856 |
Revenue recognized during the period that was included in deferred revenue | $ 212,000 |
DEFERRED COMMISSIONS - Schedule
DEFERRED COMMISSIONS - Schedule of Impairment of Deferred Commissions (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deferred commissions | $ 114,503 | $ 108,624 |
DEFERRED COMMISSIONS - Schedu_2
DEFERRED COMMISSIONS - Schedule of Amortization of Deferred Commissions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Amortization of deferred commissions | $ 10,186 | $ 8,861 | $ 31,388 | $ 24,922 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES - Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 79,231 |
Acquisition | 2,701 |
Currency translation adjustments | 22 |
Ending balance | $ 81,954 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES - Schedule of Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | $ 135,666 | $ 133,372 |
Accumulated Amortization | (120,622) | (117,624) |
Total | 15,044 | 15,748 |
Client-related | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 63,163 | 63,168 |
Accumulated Amortization | (56,988) | (55,877) |
Total | 6,175 | 7,291 |
Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 67,142 | 64,843 |
Accumulated Amortization | (58,273) | (56,386) |
Total | 8,869 | 8,457 |
Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Cost | 5,361 | 5,361 |
Accumulated Amortization | (5,361) | (5,361) |
Total | $ 0 | $ 0 |
Minimum | Client-related | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 4 years | 4 years |
Minimum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 2 years | 2 years |
Minimum | Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 1 year | 1 year |
Maximum | Client-related | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 10 years | 10 years |
Maximum | Technology | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 10 years | 10 years |
Maximum | Other | ||
Goodwill and Other Intangible Assets [Line Items] | ||
Useful Lives | 5 years | 5 years |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES - Amortization Expense of Acquired Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 1,002 | $ 1,018 | $ 3,006 | $ 3,051 |
Cost of revenue | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 629 | 647 | 1,887 | 1,940 |
Selling and marketing | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 373 | $ 371 | $ 1,119 | $ 1,111 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLES - Estimated Future Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 981 | |
2022 | 3,886 | |
2023 | 3,618 | |
2024 | 2,849 | |
2025 | 2,509 | |
2026 and thereafter | 1,201 | |
Total | $ 15,044 | $ 15,748 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) ft² in Thousands, $ in Thousands | Jul. 06, 2021USD ($)ft² | Mar. 31, 2021USD ($) | Feb. 28, 2021USD ($) | Sep. 30, 2021USD ($) | Aug. 01, 2021USD ($) | Dec. 31, 2020USD ($) |
Lessee, Lease, Description [Line Items] | ||||||
Gain lease termination | $ 18,000 | |||||
Decrease in lease liabilities | $ 21,100 | |||||
Base rent to paid, year one | $ 9,948 | |||||
Lease liabilities | 97,756 | |||||
Right-of-use assets | $ 91,349 | $ 67,651 | ||||
Building | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Term of contract | 11 years | 4 years 6 months | ||||
Based rent to paid (annually per year) | $ 2,000 | |||||
Area of office space lease (in square feet) | ft² | 131 | |||||
Base rent to paid, year one | $ 6,000 | |||||
Base rent increase percentage | 0.03 | |||||
Improvement allowance | $ 11,800 | |||||
Lease liabilities | $ 42,100 | |||||
Right-of-use assets | $ 42,100 |
LEASES - Operating Lease Expens
LEASES - Operating Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||||
Fixed lease costs | $ (3,108) | $ 5,172 | $ (6,780) | $ 14,933 |
Short-term lease costs | 542 | 422 | 1,516 | 1,248 |
Variable lease costs | 1,099 | 1,259 | 3,826 | 3,506 |
Operating lease expenses | $ (1,467) | $ 6,853 | $ (1,438) | $ 19,687 |
LEASES - Right of Use Assets (D
LEASES - Right of Use Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease, right-of-use asset, statement of financial position | Other long-term assets | Other long-term assets |
Right of use assets | $ 91,349 | $ 67,651 |
Operating lease, liability, current, statement of financial position | Other current liabilities | Other current liabilities |
Lease liabilities | $ 10,668 | $ 18,541 |
Long-term operating lease liabilities | $ 87,088 | $ 59,053 |
LEASES - Remaining Lease Term (
LEASES - Remaining Lease Term (Details) | Sep. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Weighted-average remaining lease term | 7 years 9 months 18 days | 4 years 8 months 12 days |
Weighted-average discount rate | 4.40% | 5.40% |
LEASES - Maturities after Adopt
LEASES - Maturities after Adoption of 842 (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Leases [Abstract] | |
Remainder of 2021 | $ 961 |
Lessee, Operating Lease, Liability, to be Paid, Year One | 9,948 |
2023 | 19,607 |
2024 | 16,482 |
2025 | 13,607 |
2026 | 9,866 |
Thereafter | 48,515 |
Total lease payments | 118,986 |
Less: imputed interest | (21,230) |
Total lease liability | $ 97,756 |
LEASES - Cash Flow Information
LEASES - Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Leases [Abstract] | ||
Cash paid for leases | $ 14,403 | $ 15,503 |
Right of use assets recognized for new leases and amendments (non-cash) | $ 54,716 | $ 24,276 |
DEBT - Convertible Senior Notes
DEBT - Convertible Senior Notes Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||
Feb. 29, 2020USD ($)day$ / shares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Jan. 01, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Redemption percentage | 100.00% | |||||||||||
Convertible senior notes, net | $ 589,769,000 | $ 589,769,000 | $ 518,203,000 | |||||||||
Impact of ASU adoption | 459,632,000 | $ 529,322,000 | 459,632,000 | $ 529,322,000 | $ 522,468,000 | $ 478,925,000 | 542,172,000 | $ 556,282,000 | $ 566,611,000 | $ 539,010,000 | ||
Accounting Standards Update 2020-06 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Convertible senior notes, net | $ 587,700,000 | |||||||||||
Retained Earnings | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Impact of ASU adoption | $ 316,150,000 | $ 338,300,000 | $ 316,150,000 | $ 338,300,000 | $ 375,069,000 | $ 340,223,000 | 339,879,000 | $ 359,989,000 | $ 383,142,000 | $ 410,919,000 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Impact of ASU adoption | (52,205,000) | |||||||||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Convertible senior notes, net | $ 69,500,000 | |||||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Impact of ASU adoption | 9,399,000 | |||||||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | Accounting Standards Update 2020-06 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Impact of ASU adoption | $ 9,400,000 | |||||||||||
On or after March 1, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Redemption percentage | 100.00% | |||||||||||
Convertible debt | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Face amount | $ 600,000,000 | |||||||||||
Interest rate | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% | |||||||
Initial conversion rate | 7.4045 | |||||||||||
Debt conversion amount | $ 1,000 | |||||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 135.05 | |||||||||||
Convertible debt | After the calendar quarter ending on June 30, 2020 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Threshold percentage of stock price trigger | 130.00% | |||||||||||
Threshold trading days | day | 20 | |||||||||||
Threshold consecutive trading days | day | 30 | |||||||||||
Convertible debt | Measurement period | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Threshold percentage of stock price trigger | 98.00% | |||||||||||
Threshold consecutive trading days | day | 5 | |||||||||||
Threshold consecutive business days | day | 5 | |||||||||||
Convertible debt | On or after March 1, 2023 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Threshold percentage of stock price trigger | 130.00% | |||||||||||
Threshold trading days | day | 20 | |||||||||||
Threshold consecutive trading days | day | 30 |
DEBT - Net Carrying Amount (Det
DEBT - Net Carrying Amount (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Additional paid-in capital | $ 148,098 | $ 204,432 |
Convertible debt | ||
Debt Instrument [Line Items] | ||
Principal | 600,000 | 600,000 |
Unamortized debt discount | 0 | (71,222) |
Unamortized issuance costs | (10,231) | (10,575) |
Convertible senior notes, net | 589,769 | 518,203 |
Conversion options | 0 | 84,120 |
Issuance costs | 0 | (2,037) |
Deferred taxes | 0 | (20,479) |
Additional paid-in capital | $ 0 | $ 61,604 |
DEBT - Interest Expense (Detail
DEBT - Interest Expense (Details) - Convertible debt - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | |||||
Interest rate | 0.75% | 0.75% | 0.75% | 0.75% | 0.75% |
Contractual interest expense (0.75% coupon) | $ 1,125 | $ 1,125 | $ 3,375 | $ 2,700 | |
Amortization of debt discount | 0 | 3,807 | 0 | 9,060 | |
Amortization of issuance costs | 677 | 565 | 2,025 | 1,345 | |
Interest expense | $ 1,802 | $ 5,497 | $ 5,400 | $ 13,105 | |
Weighted-average effective interest rate | 1.20% | 4.30% | 1.20% | 4.30% |
DEBT - Future Payments of Princ
DEBT - Future Payments of Principal and Contractual Interest (Details) - Convertible debt - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Principal | ||
Remainder of 2021 | $ 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 600,000 | |
Principal, total due | 600,000 | $ 600,000 |
Interest | ||
Remainder of 2021 | 0 | |
2022 | 4,500 | |
2023 | 4,500 | |
2024 | 4,500 | |
2025 | 1,488 | |
Interest expense, total due | 14,988 | |
Total | ||
Remainder of 2021 | 0 | |
2022 | 4,500 | |
2023 | 4,500 | |
2024 | 4,500 | |
2025 | 601,488 | |
Principal and interest, total due | $ 614,988 |
DEBT - Capped Call Transactions
DEBT - Capped Call Transactions (Details) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020$ / derivativeshares | Sep. 30, 2021USD ($)$ / derivativeshares | Sep. 30, 2020USD ($)$ / derivativeshares | Sep. 30, 2021USD ($)$ / derivativeshares | Sep. 30, 2020USD ($)$ / derivativeshares | |
Debt Disclosure [Abstract] | |||||
Number of shares issuable upon conversion | shares | 4.4 | 4.4 | 4.4 | 4.4 | 4.4 |
Cap price (in dollars per share) | $ / derivative | 196.44 | 196.44 | 196.44 | 196.44 | 196.44 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ 83,597 | $ 0 | |||
Issuance | 0 | 51,900 | |||
Fair value adjustment | (7,543) | 19,816 | |||
Ending balance | $ 76,054 | $ 71,716 | $ 76,054 | $ 71,716 |
DEBT - Credit Facility (Details
DEBT - Credit Facility (Details) | 1 Months Ended | 15 Months Ended | |||
Sep. 30, 2020USD ($) | Dec. 31, 2021USD ($) | Mar. 31, 2022 | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | |||||
Remaining borrowing capacity | $ 0 | $ 0 | |||
PNC bank, national association | Forecast | |||||
Debt Instrument [Line Items] | |||||
Minimum consolidated coverage ratio | 3.5 | ||||
Credit agreement | PNC bank, national association | Forecast | |||||
Debt Instrument [Line Items] | |||||
Minimum required cash and investments held | $ 200,000,000 | ||||
Maximum consolidated net leverage ratio | 3.5 | ||||
Line of Credit | PNC bank, national association | Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Revolving credit agreement term | 5 years | ||||
Senior notes | $ 100,000,000 | ||||
Increase in aggregate commitment amount | $ 200,000,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Assets | ||
Marketable securities | $ 235,437 | $ 293,269 |
Capped call transactions | 76,054 | 83,597 |
Cash equivalents | ||
Fair Value Assets | ||
Cash equivalents | 11,087 | 56,339 |
Venture investments | ||
Fair Value Assets | ||
Venture investments | 9,713 | 8,345 |
Level 1 | ||
Fair Value Assets | ||
Marketable securities | 0 | 0 |
Capped call transactions | 0 | 0 |
Level 1 | Cash equivalents | ||
Fair Value Assets | ||
Cash equivalents | 11,087 | 42,339 |
Level 1 | Venture investments | ||
Fair Value Assets | ||
Venture investments | 0 | 0 |
Level 2 | ||
Fair Value Assets | ||
Marketable securities | 235,437 | 293,269 |
Capped call transactions | 76,054 | 83,597 |
Level 2 | Cash equivalents | ||
Fair Value Assets | ||
Cash equivalents | 0 | 14,000 |
Level 2 | Venture investments | ||
Fair Value Assets | ||
Venture investments | 0 | 0 |
Level 3 | ||
Fair Value Assets | ||
Marketable securities | 0 | 0 |
Capped call transactions | 0 | 0 |
Level 3 | Cash equivalents | ||
Fair Value Assets | ||
Cash equivalents | 0 | 0 |
Level 3 | Venture investments | ||
Fair Value Assets | ||
Venture investments | $ 9,713 | $ 8,345 |
FAIR VALUE MEASUREMENTS - Chang
FAIR VALUE MEASUREMENTS - Change in Investment in Privately Held Companies (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Convertible debt fair value | $ 676,200 | $ 706,500 | |
Privately held investment | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | 8,345 | $ 4,871 | |
New investments | 500 | 3,006 | |
Sales of investments | (400) | (1,424) | |
Changes in foreign exchange rates | (52) | 0 | |
Changes in fair value included in other income | 100 | 1,374 | |
Changes in fair value included in other comprehensive income | 1,220 | 100 | |
Ending balance | $ 9,713 | $ 7,927 |
REVENUE - Geographic Revenue (D
REVENUE - Geographic Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 256,268 | $ 225,951 | $ 895,469 | $ 718,917 |
Percent of total revenue | 100.00% | 100.00% | 100.00% | 100.00% |
U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 132,016 | $ 120,971 | $ 515,881 | $ 436,199 |
Other Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 17,510 | 10,737 | 43,469 | 35,009 |
United Kingdom (“U.K.”) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 25,982 | 25,150 | 86,747 | 68,246 |
Europe (excluding U.K.), Middle East, and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 46,306 | 39,656 | 143,763 | 106,472 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 34,454 | $ 29,437 | $ 105,609 | $ 72,991 |
Total revenue | U.S. | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of total revenue | 52.00% | 53.00% | 58.00% | 61.00% |
Total revenue | Other Americas | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of total revenue | 7.00% | 5.00% | 5.00% | 5.00% |
Total revenue | United Kingdom (“U.K.”) | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of total revenue | 10.00% | 11.00% | 10.00% | 9.00% |
Total revenue | Europe (excluding U.K.), Middle East, and Africa | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of total revenue | 18.00% | 18.00% | 15.00% | 15.00% |
Total revenue | Asia-Pacific | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Percent of total revenue | 13.00% | 13.00% | 12.00% | 10.00% |
REVENUE - Revenue Stream (Detai
REVENUE - Revenue Stream (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 256,268 | $ 225,951 | $ 895,469 | $ 718,917 |
Revenue recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 217,973 | 186,167 | 623,321 | 531,894 |
Revenue recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 38,295 | 39,784 | 272,148 | 187,023 |
Pega Cloud | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 78,369 | 54,776 | 219,520 | 147,080 |
Pega Cloud | Revenue recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 78,369 | 54,776 | 219,520 | 147,080 |
Client Cloud | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 118,609 | 110,602 | 488,757 | 391,042 |
Maintenance | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 83,188 | 74,670 | 237,531 | 220,587 |
Maintenance | Revenue recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 83,188 | 74,670 | 237,531 | 220,587 |
Term license | Revenue recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 35,421 | 35,932 | 251,226 | 170,455 |
Consulting | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 56,416 | 56,721 | 166,270 | 164,227 |
Consulting | Revenue recognized over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 56,416 | 56,721 | 166,270 | 164,227 |
Cloud subscription | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 196,978 | 165,378 | 708,277 | 538,122 |
Perpetual license | Revenue recognized at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 2,874 | $ 3,852 | $ 20,922 | $ 16,568 |
REVENUE - Performance Obligatio
REVENUE - Performance Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 30, 2020 |
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | $ 1,034,026 | $ 837,990 |
Revenue remaining performance obligation, percentage | 100.00% | 100.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Expected timing of satisfaction | 2 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | ||
Disaggregation of Revenue [Line Items] | ||
Expected timing of satisfaction | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Expected timing of satisfaction | 2 years | 3 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | ||
Disaggregation of Revenue [Line Items] | ||
Expected timing of satisfaction | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Expected timing of satisfaction | 3 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Disaggregation of Revenue [Line Items] | ||
Expected timing of satisfaction | ||
1 year or less | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | $ 577,650 | $ 456,777 |
Revenue remaining performance obligation, percentage | 56.00% | 54.00% |
1-2 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | $ 261,071 | $ 207,214 |
Revenue remaining performance obligation, percentage | 25.00% | 25.00% |
2-3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | $ 127,188 | $ 119,382 |
Revenue remaining performance obligation, percentage | 12.00% | 14.00% |
Greater than 3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | $ 68,117 | $ 54,617 |
Revenue remaining performance obligation, percentage | 7.00% | 7.00% |
Pega Cloud | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | $ 571,461 | $ 506,807 |
Pega Cloud | 1 year or less | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 284,359 | 211,661 |
Pega Cloud | 1-2 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 177,214 | 157,500 |
Pega Cloud | 2-3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 79,775 | 93,283 |
Pega Cloud | Greater than 3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 30,113 | 44,363 |
Maintenance | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 327,696 | 239,148 |
Maintenance | 1 year or less | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 196,667 | 170,643 |
Maintenance | 1-2 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 59,360 | 40,631 |
Maintenance | 2-3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 37,734 | 18,277 |
Maintenance | Greater than 3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 33,935 | 9,597 |
Term license | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 66,802 | 63,185 |
Term license | 1 year or less | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 49,265 | 50,788 |
Term license | 1-2 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 16,872 | 5,341 |
Term license | 2-3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 420 | 7,052 |
Term license | Greater than 3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 245 | 4 |
Perpetual license | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 22,971 | 10,408 |
Perpetual license | 1 year or less | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 15,686 | 8,708 |
Perpetual license | 1-2 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 1,064 | 1,700 |
Perpetual license | 2-3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 4,094 | 0 |
Perpetual license | Greater than 3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 2,127 | 0 |
Consulting | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 45,096 | 18,442 |
Consulting | 1 year or less | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 31,673 | 14,977 |
Consulting | 1-2 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 6,561 | 2,042 |
Consulting | 2-3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | 5,165 | 770 |
Consulting | Greater than 3 years | ||
Disaggregation of Revenue [Line Items] | ||
Revenue remaining performance obligation | $ 1,697 | $ 653 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | $ 28,695 | $ 27,925 | $ 89,483 | $ 76,755 |
Income tax benefit | (5,845) | (5,604) | (18,028) | (15,293) |
Cost of revenue | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 5,114 | 5,100 | 16,889 | 15,636 |
Selling and marketing | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 13,376 | 12,658 | 41,844 | 33,968 |
Research and development | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | 6,231 | 5,765 | 19,343 | 17,066 |
General and administrative | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation before tax | $ 3,974 | $ 4,402 | $ 11,407 | $ 10,085 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Unrecognized stock-based compensation expense | $ 131.7 |
Weighted-average period of recognition of unrecognized stock-based compensation expense (in years) | 2 years 1 month 6 days |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Stock-Based Compensation Awards Granted (Details) - Employees shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)shares | |
Restricted stock units | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Grants in period (in shares) | shares | 819 |
Total Fair Value | $ | $ 106,286 |
Non-qualified stock options | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Options granted in period (in shares) | shares | 1,472 |
Total Fair Value | $ | $ 55,643 |
Common Stock | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |
Grants in period (in shares) | shares | 5 |
Total Fair Value | $ | $ 601 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
(Benefit from) income taxes | $ (24,826) | $ (25,053) | $ (54,360) | $ (61,182) | |
Effective income tax benefit rate | 68.00% | 48.00% | |||
Deferred income taxes and other assets, noncurrent | $ 157,900 | $ 157,900 | $ 88,100 |
(LOSS) PER SHARE (Details)
(LOSS) PER SHARE (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Feb. 29, 2020$ / derivativeshares | Sep. 30, 2021USD ($)$ / shares$ / derivativeshares | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2020USD ($)$ / shares$ / derivativeshares | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2021USD ($)$ / shares$ / derivativeshares | Sep. 30, 2020USD ($)$ / shares$ / derivativeshares | |
Earnings Per Share [Abstract] | |||||||||
Net (loss) | $ | $ (56,468) | $ 37,291 | $ (6,617) | $ (19,267) | $ (20,740) | $ (25,372) | $ (25,794) | $ (65,379) | |
Weighted-average common shares outstanding (in shares) | 81,526 | 80,537 | 81,284 | 80,191 | |||||
(Loss) per share, basic (in dollars per share) | $ / shares | $ (0.69) | $ (0.24) | $ (0.32) | $ (0.82) | |||||
Weighted-average common shares outstanding, assuming dilution (in shares) | 81,526 | 80,537 | 81,284 | 80,191 | |||||
(Loss) per share, diluted (in dollars per share) | $ / shares | $ (0.69) | $ (0.24) | $ (0.32) | $ (0.82) | |||||
Outstanding anti-dilutive stock options and RSUs (in shares) | 5,815 | 6,622 | 6,136 | 6,166 | |||||
Convertible debt (in shares) | 4,400 | 4,400 | 4,400 | 4,400 | |||||
Number of shares issuable upon conversion | 4,400 | 4,400 | 4,400 | 4,400 | 4,400 | ||||
Cap price (in dollars per share) | $ / derivative | 196.44 | 196.44 | 196.44 | 196.44 | 196.44 |